Leadership in times of crisis
The 17th of October marked a new era for Lebanon. The revolution which aimed at combating the unprecedented level of corruption had a very high cost. The level of uncertainty and volatility being witnessed since then has left its repercussions on the economic and financial level in a way that Lebanon hasn’t experienced during the civil war, post the assassination of late prime minister Hariri or even after July war 2006. Businesses are catastrophically suffering and the whole economy is in crisis. Classical leadership models won’t serve well in such critical times. Being Agile is not an option. Yet not all business leaders have what is required to be agile and to adopt the trendiest leadership models. Lebanon over the past 3 months has become a unique case study which demonstrates how leadership should be exercised during times of crisis.
Around 2,500 years ago, Heraclitus, a pre-Socratic Greek philosopher, said, “The only constant in life is change.” Back then, Heraclitus was not able to refresh his Twitter or Facebook account to see that what was trending a minute ago would disappear from his timeline in few seconds. In that era, the world was not disrupted by this many uncertainties, ambiguities, or complexities. The world was not interconnected as much, and consumers were not spoiled to the extent of updating their needs, wants, demands, desires, tastes, and preferences every so often. Despite all this, Heraclitus had the gall to talk about change!
With these new factors shaping our world, change has gained more momentum than ever before, which requires a kind of leadership responsive or adaptive to this change. Being a manager does not suffice; being a leader is indispensable. It is worth mentioning that even the leadership style that used to be trendy years ago has become obsolete in our new world of business.
Leadership in Action: Complexity
- According to the Economist Intelligence Unit, organizations are launching more major change initiatives than ever before: three to five per year, on average.
- The Corporate Executive Board reports that globally, half of employees expect a major change in six months.
- IBM’s Global Chief Executive Officer Study shows that 79% of CEOs say that the level of uncertainty and complexity will get even higher; less than half say they are prepared to manage it.
- Forum Global survey of 700 leaders shows that 72% of them report high or extremely high increases in uncertainty within their companies.
- Forum VOC research indicates that twice as many business leaders say that “the ability to lead change” is a top business challenge as compared with 2010.
Triggers for New Forms of Leadership
- The skills needed for leadership have changed—more complex and adaptive thinking abilities are needed.
- The majority of managers have developed by virtue of on-the-job experiences, training, and coaching/ mentoring; while these factors are all still important, leaders are no longer developing fast enough or in the right ways to match the new uncertain environment. A global mindset is required to lead.
- Companies are facing a development challenge, which is the process of growing “bigger” minds and developing more agility in dealing with problems.
- The environment has changed—it is more complex, volatile, and unpredictable. In a study conducted by the Center for Creative Leadership, the environment in which leaders must work is characterized by the acronym VUCA. The letters stand for:
- Volatile: Change happens rapidly and on a large scale
- Uncertain: The future cannot be predicted with any precision
- Complex: Challenges are complicated by many factors and there are a few single causes or solutions
- Ambiguous: There is little clarity on what events mean and what effect they may have
Challenges for Future Leaders
- Information overload due to complexity and the amount of factors that have an impact on businesses
- The interconnectedness of systems and business communities
- The dissolution of traditional organizational boundaries
- New technologies that disrupt old work practices
- The different values and expectations of new generations entering the workplace
- Increased globalization, leading to the need for cross cultural leadership
Skills Required for Future Leaders
- Reflecting the changes in the environment, especially since the competencies that will be most valuable to future leaders appear to be changing
- Being culturally savvy
- Constant learning and development
- Network thinking
Power and Leadership
Power is the ability to get someone to do something he or she would not do otherwise. Having an impact on the behaviors of employees to direct their efforts toward achieving a common goal or a shared vision is what leaders usually aim at. The form of power utilized defines whether the company and employees are being led or managed. In a notable study of power conducted by social psychologists John French and Bertram Raven in 1959, power has been divided into five separate and distinct forms:
- Coercive: uses the threat of force to gain compliance
- Reward: uses the right of some to offer or deny tangible, social, emotional, or spiritual rewards for others for doing what is wanted or expected of them
- Legitimate: uses the authority one has based on his or her position
- Referent: is rooted in the belonging one might have to a certain group, while sharing its values and beliefs to a certain extent
- Expert: uses on one’s knowledge, experience, and special skills or talents. Expertise can be demonstrated by reputation, credentials certifying expertise, and actions
With the advent of information technology and knowledge economy, a new form of power gained momentum. Information power comes as a result of possessing knowledge that others need or want. Information can lead to a certain influence, impact decision making, establish credibility, and being in control. Providing rational arguments, using information to persuade others, and using facts and manipulating information can create a power base. The particularity of this form of power is that it is not linked to a position in the organizational chart. Any employee who possesses information that is needed to achieve the organizational goals is powerful. This leads us to a new form of leadership, which is distributed leadership.
When a person suffices oneself with coercive, reward, and legitimate power, one exercises a kind of managerial ability to run the business. However, when power evolves into the expert or informational kind, leadership starts to become more apparent.
Peter Drucker says, “The only definition of a leader is someone who has followers.” Leadership can be perceived as a process of social influence that maximizes the efforts of others toward the achievement of organizational goals.